Director of Company
A director of company is a person from a group of managers who leads or supervises a particular area of a private limited company. a private limited company that uses this term often have many director of company spread throughout different business functions or roles (e.g. director of human resources). The director of company usually reports directly to a vice president or to the CEO directly in order to let them know the progress of the organization. The large private limited company also sometimes have assistant director of company or deputy directors. Director of company commonly refers to the lowest level of executive in an organization, but many large private limited companies use the title of an associate director more frequently. Some private limited companies also have regional directors and area director of company. Regional directors are present in companies that are organized by location and have their departments under that. They are responsible for the operations for their particular country. Though directors are the first stage in the executive team, area directors are seen as higher up, based on their area of control.
Meaning of Director of Company (private Limited Company) According To the Companies Act 2013
The supreme executive authority controlling the management
and affairs of a private limited company vests in the team of directors of company,
collectively known as its Board of Directors. At the core of the corporate
governance practice is the Board of Directors which oversees how the
management serves and protects the long term interests of all the
stakeholders of the Private Limited Company. The institution of board of directors of company was based on the premise that a group of trustworthy and respectable
people should look after the interests of the large number of shareholders
who are not directly involved in the management of the private limited company.
The position of board of director of company is that of trust as the board is
entrusted with the responsibility to act in the best interests of the private limited company
Although the Board comprises individual director, yet the actions
and deeds of directors of company is individually functioning cannot bind the
private limited company, unless a particular director has been specifically authorized
by a Board resolution to discharge certain responsibilities on behalf of
the private limited company.
The Companies Act, 2013 does not contain an exhaustive
definition of the term “director”. Section 2 (34) of the Act prescribed
that “director” means a director appointed to the Board of a company is called director of company.
A director is a person appointed to perform the duties and
functions of director of a company in accordance with the provisions
of the Companies Act, 2013
Who can be appointed as a Director of company
Appointment of a Director of company is not only a crucial administrative requirement, but is also a procedural requirement that has to be fulfilled by every private limited company. A director may be defined as an individual who directs, controls or manages the affairs of the private limited Company.A director of company is a person who is appointed to perform the duties and functions of a private limited company in accordance with the provisions of The Company Act, 2013. They are comparatively known as Board of Directors or directors of company.
Minimum/Maximum Number of Directors ofCompany
The Companies Act, 2013 requires that every company shall have a :
Minimum number of 3 directors in case of a public limited company
Minimum number of two directors in case of a private limited company
Minimum number of one director in case of a One Person Company
A company can appoint maximum 15 fifteen directors.
A company may appoint more
than fifteen directors after passing a special resolution in general
meeting and approval of Central Government is not required.
Appointment of Directors of company
Generally, in a public company or a private company subsidiary of a public company, two-thirds of the total numbers of Directors are appointed by the shareholders and the remaining one-third is appointed in accordance with the manner prescribed in Articles failing which, the remaining one-third of the Directors must be appointed by the shareholders. The Articles of a public company or a private company subsidiary of a public company may provide for the retirement of all the Directors at every AGM.
In a private limited company, which is not a subsidiary of a public company, the Articles can prescribe the manner of appointment of any or all the Directors of company. In case the Articles are silent, the Directors of company must be appointed by the shareholders.
The Companies Act also permits the Articles to provide for the appointment of two-thirds of the Directors of company according to the principle of proportional representation, if so adopted by the company in question.